How to Navigate Industry Complexity

I’ve built companies through 3 major recessions, including the Great Financial Crisis. I've seen the collapse of Bear Stearns, Lehman Brothers, and many others. If Trump doesn't change course, that is where we are headed... So, how should we react now that the US is reshaping the global economic order and triggering a self-inflicted recession?  The playbook for navigating the new tariff regime is straightforward. The fundamental characteristic of this new world is uncertainty. And Profitable Efficient Growth (PEG) is the proper antidote to uncertainty. Here's how executives can successfully navigate the next 9 months (broken out by MACRO, BUSINESS and MINDSET lessons): MACRO 1. Review your supply chain and understand component pieces and what exposure you have to various suppliers and customers. 2. Review your customer base by geography and understand your exposure, not just for tariffs but for retaliatory behavior impacted by country-specific animus. 3. Understand currency exposure and estimate impact of dollar-denominated contract erosion. BUSINESS 1. Improve the frequency of your forecasting and ensure you’re forecasting cash, expenses and revenue on at least a monthly basis. 2. Develop a clear POV on fixed vs variable costs and leverage non-FTE hiring for maximum flexibility in case things go poorly. 3. Review your messaging to illustrate why your product is essential in a downturn. Enable your Sales and CS teams with talking points so they can lean into price and budget when the objection arises. 4. Make growth investments but ensure they're tranched. Avoid more than 2x-ing any growth investment. Layer in 1.5x investments, monitor for performance, and then invest again. 5. Ensure you're not over-extended. Leaning too far into growth on the expectation that things will go up may create financial jeopardy later this year. MINDSET 1. Leverage healthy mindset practices to ensure you remain calm and clear including meditation, exercise, and visualization. 2. Understand: Every crisis is an opportunity for the confident and those willing to lead. 3. Pause and ask yourself the question, “How is this a huge opportunity for our business?”. Journal what comes to you from a focused session. 4. Project clarity and confidence to your team. Let them know your organization has intentionally been designed to weather storms like these. We just got out of the post-COVID tech recession. These lessons should be fresh in our minds but they bear repeating. The folks that lectured us that we should stop thinking about margins and profitability were premature. We all need to be smart, responsible and prudent. This doesn't mean fearful. And this doesn’t mean we shouldn’t try to grow. But it does mean it’s not the time for foolishness. We need to understand our market and our exposure. We need to design our businesses for anti-fragility. Our bets need to be sized. And we need to find the opportunity in the chaos.

#Tariff-Proof Your Business: How Mexico & Canada Can Use AI to Navigate VUCA 🚀 Let's be honest - the constant threat of US tariffs isn't just a business challenge, it's an anxiety-inducing roller coaster. I've seen the toll it takes: sleepless nights, shelved expansion plans, and that constant knot in your stomach wondering "what if." 😓 I get it. When your business, your employees' livelihoods, and sometimes entire communities depend on stable trade relationships, this uncertainty is more than just a planning problem—it's deeply personal. The VUCA Reality We're All Feeling: * Volatility: Tariff announcements that change markets overnight, leaving us scrambling * Uncertainty: That helpless feeling of not knowing when or which sectors will be targeted next * Complexity: Supply chains so interconnected that one policy change creates dozens of ripple effects * Ambiguity: Mixed signals that leave us questioning which path forward is right The AI-Powered Path to Peace of Mind: Here's some ideas about how AI and Data Analytics can transform overwhelming complexity into manageable strategy: 1. Early Warning Systems 📡 *The Human Benefit: Replace constant vigilance with automated alerts. Sleep better knowing you'll have advance notice of policy shifts. *Practical Implementation: Platforms monitor sentiment across news outlets and social media, detecting rhetorical shifts that precede policy changes. *Simple First Step: Start with a weekly digest of trade sentiment analysis to gain confidence in the system before building more complex automations. 2. Dynamic Supply Chain Modeling 🔄 *The Human Benefit: Transform paralyzing "what-ifs" into clear, actionable plans for multiple scenarios. *Practical Implementation: Existing tools create digital twins of your supply network and test different tariff scenarios. *Simple First Step: Model your three most vulnerable product lines first to gain quick insights without overwhelming your team. 3. Regulatory Compliance Co-Pilots 🤖 *The Human Benefit: End the exhausting task of constantly tracking rule changes across multiple jurisdictions. *Practical Implementation: systems that provide real-time updates on tariff changes. *Simple First Step: Set up automated alerts for your most critical markets to build confidence in the system. A More Humane Approach to Big Problems: The beauty of these approaches isn't just efficiency—it's the mental space they create. When systems handle the overwhelming complexity, humans can focus on strategic decisions and creative solutions. What part of trade uncertainty keeps you up at night? I'd love to hear your experiences and share ideas on how we might tackle these challenges together. #AIStrategy #InternationalTrade #SupplyChainResilience #DataAnalytics #VUCA #TariffNavigation

No wonder being in supply chain is tough... This document shows 7 complexities in supply chain and how to address them: 1️⃣ The unexpected happens (almost every time) ↳ What: supplier delays, machine breakdowns, changes in demand; disruptions are inevitable ↳ How to fix: build a resilient and agile supply chain with risk mitigation strategies and plans 2️⃣ The inventory beast ↳ What: too many SKUs, stockouts, excess inventory that translate into losses and cash trapped ↳ How to fix: implement robust inventory planning in S&OP context, segmentation, and demand-driven replenishment strategies 3️⃣ Demanding stakeholders with competing priorities ↳ Sales wants inventory availability, finance wants lower costs, operations wants efficiency ↳ How to fix: align through S&OP, balancing service levels, costs, and operational aspects 4️⃣ Abundance of inaccurate data ↳ Forecast errors, wrong lead times, messy BOMs. This bad data leads to bad decisions. ↳ How to fix: prioritize data governance, master data management, and data validation 5️⃣ Predicting future demand ↳ Past trends don’t always predict the future, and external factors keep changing the game ↳ How to fix: use a combination of statistical forecasting (when it works), market intelligence, AI-driven insights, sales and marketing inputs 6️⃣ Everything is interconnected ↳ The domino effect is in full force: a supplier delay translates into missed shipments and unhappy or lost customers. ↳ How to fix: improve visibility and understand the impact; build and run an effective S&OP and S&OE (sales and operations execution) 7️⃣ Minor errors cause huge catastrophes ↳ A small miss can lead to massive disruptions ↳ How to fix: strengthen process controls, automate where possible, and promote a culture of proactive problem-solving Any others to add?

Reality isn't linear. Your thinking shouldn't be either. Yesterday's logic is deeply rooted in linear cause-and-effect thinking. More precisely, the extrapolation of cause-and-effect thinking from a theoretically linear world to a real-life complex world. This way of thinking gives us an unfounded expectation of certainty and control. It leads to static and brittle strategy. Strategy that's likely to break. To build more robust and dynamic strategy, adopt a more enactive approach to strategy. Here are five actionable steps you can take to incorporate enactive thinking into your management approach: 1️⃣ 𝐄𝐦𝐛𝐫𝐚𝐜𝐞 𝐮𝐧𝐜𝐞𝐫𝐭𝐚𝐢𝐧𝐭𝐲: Accept that you cannot predict or control every aspect of a project. Use this understanding to inform your decision-making and prioritize adaptability over rigid planning. Recognize that the more complex a situation is, the less effective linear thinking becomes. 2️⃣ 𝐁𝐫𝐞𝐚𝐤 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬 𝐢𝐧𝐭𝐨 𝐬𝐦𝐚𝐥𝐥𝐞𝐫, 𝐦𝐚𝐧𝐚𝐠𝐞𝐚𝐛𝐥𝐞 𝐩𝐢𝐞𝐜𝐞𝐬: Instead of trying to tackle a complex initiative all at once, break it down into smaller, more manageable projects that allow for more frequent feedback and iteration. This approach helps you navigate complexity more effectively and reduces the risk of catastrophic failure. 3️⃣ 𝐂𝐫𝐞𝐚𝐭𝐞 𝐚 𝐬𝐚𝐟𝐞-𝐭𝐨-𝐟𝐚𝐢𝐥 𝐞𝐧𝐯𝐢𝐫𝐨𝐧𝐦𝐞𝐧𝐭: Encourage experimentation and learning by fostering a culture where failure is seen as an opportunity to learn and improve, rather than a mark of incompetence. By making it safe to fail, you create an environment where people are more likely to take risks and innovate. 4️⃣ 𝐈𝐭𝐞𝐫𝐚𝐭𝐞 𝐚𝐧𝐝 𝐚𝐝𝐚𝐩𝐭 𝐛𝐚𝐬𝐞𝐝 𝐨𝐧 𝐟𝐞𝐞𝐝𝐛𝐚𝐜𝐤: Regularly review the progress of your projects and make adjustments as needed, using the insights gained from small failures and successes to inform your next steps. This iterative approach allows you to learn from experience and adapt your strategies to better address complex challenges. 5️⃣ 𝐀𝐥𝐢𝐠𝐧 𝐭𝐡𝐞 𝐬𝐢𝐳𝐞 𝐨𝐟 𝐲𝐨𝐮𝐫 𝐛𝐞𝐭𝐬 𝐰𝐢𝐭𝐡 𝐲𝐨𝐮𝐫 𝐮𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐨𝐟 𝐭𝐡𝐞 𝐨𝐝𝐝𝐬: As you gain more knowledge and confidence in your approach, gradually increase the size of your bets to capitalize on the higher likelihood of success. This allows you to take calculated risks based on your growing understanding of the complex environment you're operating in. In short, enactive strategy is about hacking your luck and creating conditions that change your odds of success. If you want more dynamic strategy - be a luck hacker. Agree? --------- 💡 If you like this kind of thinking, check out my masterclass on Strategic Thinking for Advantage. (30% discount with the coupon code "SPRING24" - ends soon) Secure a seat while you can: https://lnkd.in/gGQpGm23